Rebooting economy: scenario simulation. When things start to get screwed up and/or imbalanced beyond repair: run a reboot process. Proposed checklist: http://www.socialism.nl/post/000/135 How would it work out in an area with little chaos: where telephones continue to work, doctors and nurses report to work, shops are not looted, where neighborhoods are not terrorized by excitable gangs. The economy is still going on somewhat, despite the injustice of the economic process which is of course nothing new, but the banks have totally collapsed, all their records have been scrambled, they are bankrupted and for argument sake say they all burned down. What then. The below should be a scenario realistic enough that it could actually happen this way (virtual reality check). Example fantasy: Rob: Government person managing the process Sietske: member of the public day 1: Rob: Asks the mint (or high end printing company) to come up with new currency bill designs for 0.25, 1, 5, 20 and 50 denominations sufficient to repel significant forgery for at least one year. The mint can get any resource in the Nation it needs to start printing these in a few days, for a total value of 1000 * population. All bills get a short term expiration date on them, related to expected forgery breakdown. The printed bills will be warehoused centrally near or at the mint, under high end military security. : The mint should also design some check-forms where people can write a check that is pre-printed with their account number to another account, providing hand-written to/from name, account number and bank name/area. The mint should print the checks in sequential order of account-number (if possible), 5 checks per account for starters, more when all accounts have 5 checks. The account numbers will have 12 numbers, starting from 0 up to 1.3 million, then 2 up to 3.3 million, 4 to 5.3 million, etc, 30 times. Each such batch should be packaged separately for transport. -> The mint knows what to do. Rob has spend 45 minutes on giving this order to the mint. Rob: Asks a report on the availability of basic short term life necessity commodities in the Nation, such as food, water, fuels. Where do they come from, what is needed to keep the flow going, what is needed to increase the flow if necessary. Sietske: Another day cleaning some "objects." Goes to grocery to buy some food. Rob: Takes out a map of the Nation, divides it into areas of about 1 million persons using existing county/province/borough lines with a pencil. This ends up producing 30 sectors. He gives the list to a Govt employee and says: to make a list of the highest ranking executive Govt person in each sector with address and phone/fax numbers, to contact each of them informing them that they should prepare a list of all persons that live in that area, and that they should prepare a team of 5 intelligent accountants and/or such type of people ready on call. Day 2: Sietske: Another day cleaning her objects. Day 3: Sietske: Another day cleaning her objects. Day 4: The mint starts printing 0.25, 1, and 5 notes. Rob: 8 Government persons appear to be on vacation, Rob sighs and says that obviously the next in line will have to be found. Day 5: Rob: Gets list, 5 areas haven't managed to assemble a team yet, the rest has a team on call and has a list of everyone there. He communicates to each area their banking number: 0-1, 2-3, 4-5 up to 30 times. He asks a secretary to call all teams to ask them their banking number. Seems there's two areas that think they are 30-31, turns out one of them should be 12-13. Rob corrects the problem. Rob gets frustrated with the 5 remaining areas without a team, and starts to assemble 5 teams for himself that will go to the areas that have no teams yet. Rob: Prepares a press statement in which he says that there will be a new banking system shortly. ``Nothing to worry about...'' Rob asks an employee to assemble the top Govt infrastructure people in the Nation, and to ask them whether there is a use for new laborers who don't know much about working. Turns out there isn't much to do. Rob starts thinking about a place to offer finance people job security somewhere, but he can't figure of something. Rob: Orders that all the teams find a suitable offices area large enough to handle retail checking accounts for 1 million persons. The teams are to set up a checking account for everyone on the list, attract more accounting personnel and furnish the buildings with sufficient security to prevent robbery. This should be ready to receive costumers who want to withdraw or deposit cash. There will have to be sufficiently secure areas to store cash. There will be provided some on the spot armed security from Govt. This should be ready as soon as possible. Day 8: Rob: Hears that the mint has outsourced check-printing and that already millions of checks have been printed. Rob is happy to hear it, orders that they are distributed to all the core teams in all areas. The checks will make it quicker if people want to transfer funds to someone else: they can fill in the check while waiting, and then hand it over for processing. The printing company even managed to put in the sequential account numbers, which surprises Rob (and me). Turns out the mint has extended the "use any resource" mandate to the printing company, and the printing company ordered some high end equipment using Govt money. ``Well, as long as it gets done they can keep it'' Rob thinks, scratching his ear as he sees the multi-million unit bill. Day 9: Rob: Informs whether there is security set up at the mint and at the new banking establishments, turns out nothing has been done and nobody has heard a thing about it. Rob gets fed up and calls high ranking military officers and asks them to set up high end protection of the mint and patrols in the banking areas. Rob asks an employee to call all relevant police agencies in each area, to set up some security at the new banks. Employees comes back that the police doesn't want to do it because it is not their job to protect buildings. Rob loses it and goes home frustrated. Day 10: Rob: Calls the top police people and makes it clear he will fire all police officers if they don't patrol inside the bank. Rob suddenly realizes that it is not a good idea to have military security in a bank. He calls the military again and asks to post the military outside and not inside, and keep the weapons out of sight and bullets not in the gun. Rob hears some protests have started because of the military security at the would be banks. Rob prepares a press statement trying to weasel himself out of it. Day 30: Rob: Quite a bit of currency has been printed. Rob doesn't trust security at the new banks yet, calls the police on how to handle secure delivery to each bank. Police turns out to have contacted some security companies that handled money delivery before, and to Rob's relieve it is all ready to go. Day 31: Rob: Hears about wealthy people leaving the country with stashes of valuables. This doesn't make Rob very happy. Pleasure yachts have vanished from the harbors, rich people suddenly all seem to have only one small and cheap car. Rob doesn't really know what to do about this, so he decides to do nothing. Day 40: : The last banks are getting their new cash deliveries, and though its not enough to hand everyone 1000 units, all the banks have at least 5 checks per account number. Rob: Decides zero hour has come, because the longer he waits the more the rich are stripping out their wealth and running out. Can't afford to wait much longer, the rich are effectively stealing from the Nation once again. Once the switch is made, everything is Government owned, it can't be taken away. Rob regrets not having closed the border for residents shipping out valuables before. Rob: Takes a long hard look at the basic life necessities report. He prepares a statement that says no grocery shops selling food will be allowed to go bankrupt during the coming transition of currency, unless it behaved outside the norm. Rob urges everyone to act as you normally would, not knowing for sure that will actually work. But its worth a try to say it, maybe. Everyone is informed they have an account credited with 1000 money units *4) in their name, and that there is a credit line at 5% interest to minus 2000 units. Everyone will be expected to pay a 200 units monthly taxation, which will be deducted from each account at the end of each month. Day 41: : In the morning Rob hears shop keepers have been calling to ask what "outside the norm" means. Rob: Prepares a press statement, saying that he really meant only that shops aren't trying to do illegal things or trying to manipulate holes in the system to get rich quick. A number of rich people have begun demonstrating in the streets, hitting golden pots with silver spoons claiming that now they can't eat. Rob suppresses an urge to disperse them with water cannons. Day 42: : Turns out there are around the block lines with the new banks, and with some banks there is an administrative chaos. Who is who, what is what. Rob fears disaster is coming. Rob: Quickly says in a press statement that everyone should have someone at home for the next 2 days, and that he'll order the army to deliver to each home some immediate cash to work with. He says that for the next 14 days only the persons with the surname starting with the next two letters of the alphabet should go to the bank to withdraw cash and get their bank account ownership document and what else they want to do. Rob quickly comes up with a calendar marking out each day and which letters. For some reason this works out, and people go home waiting for the cash. *1) Night 42: Rob: works through the night to get everyone he can find, from postal workers to army and police and whomever, to distribute cash to all homes and who is supposed to live there, at 100 additional units per adult resident. Rob figures there will be a lot of money lost now to people who don't play fair. But there is no choice, the people need money. Rob wonders whether he should distribute food stamps instead. Day 42: : People are starting to receive cash in their homes, and Rob has thrown in some food stamps of undefined value. Rob wonders how much he should make them worth. His wife suggests to make it worth one days food. Rob can't think anymore so he agrees, but realizes he has only given one food stamp per person. Day 43: Rob: orders 5 food stamps be given and that everyone can get on day food for one stamp at the grocery. The grocery will be compensated for the stamps. Some people have only gotten one stamp and not five now. Rob fears chaos and starts calling restaurants and demanding that they feed people for free. The restaurants agree on condition that they will be helped with the cost. Day 44: Rob: It seems to go well now. Some areas have running soup kitchens that Rob hasn't set up. Turns out someone else has started to take some initiative. Rob: Is exhausted, bordering on going crazy. He hears that people are getting 3 star meals for nothing in the restaurants he called. Rob is too tired to do something about it. He wonders whether he'll have to pay for that out of his own pocket later. Day 60: Rob: Asks that someone else take over for the next leg of the problem: to re-mortgage all high value items, and to zap all holdings of wealth from local residents in other nations. Day 62: Frits: Frits offers to take over because he was once a property tax assessor. Frits realizes that the homes are all already valued and that its easy to compute that into the new currency values. Frits fixes this problem quickly and he doesn't even have to leave the office for it. Day 63: : buy offers are being prepared to all the previously known owners of homes at what Frits assumes is a fair value. Frits converted the value into replacement work hours, because he isn't sure how much the money supply will vary in the near term. Frits labors all morning to make the letter in such a way home owners understand the issue. Eventually he decides to make a stab at the currency value, while thoughtfully providing a redefinition of the money. Frits decides to run a bit of a test first in the local area, and sends out 10 offers. Day 65: : Frits goes by the homes he send an offer to, and finds that people understood what value in work hours meant perfectly, but that they didn't have a clue about the money value. Frits realizes that people compute the cost and convert it into how many hours they have to work for their home each month. Frits goes by his old economy professor for some more clues. Day 70: Frits: After having gone through home evaluation and selling with a number of people head on, Frits realizes how to solve the problem. Rob is also back, Frits tells Rob that it is a good idea to leave everyone in their current home until they've gotten the re-mortgage letter and a deal is finalized. Rob agrees and tells Frits to do it himself. Rob realizes he is in a bad mood, but when he switches on the TV he's surprised to see Frits give away a great show of population herding. Even he believes Frits. Well, Frits was telling the truth, after all. The rich people are marching again, this time they are wearing trashed clothes but their make-up is perfect. Some kind of attempt at appearing pitiful. Nobody seems to take notice of these pathetic rich people. Sietske: goes to clean her objects again, as she did every day. She is not yet payed in the new currency, and pays for her groceries with what was given in the account and in cash. The food stamp program ended soon already, which was bad news because the stamps were worth a lot more. Some colleagues of Sietske have found out that the next phase of the process is that the cleaning company has the right to strike for however long they want to become a democracy, because they are with more then 30. Most cleaners already said they will definitely strike if they have to. This has Sietske a bit worried: who will know all the contacts ? But Sietske is also happy that it is a chance to get rid of the director with his big car who is always such a snob. Day 72: Sietske: Sietske arrives at work but is greeted outside by a colleague who says they will be striking because they want to democratize the company now. Sietske doesn't agree but says she does, but that she still has to clean the object ``or we will lose the business !'' Her colleague laughs and says she's right. Day 73: : The Government releases the rules for company democratization. Day 74: Sietske: gets a call for a meeting on her phone, so she goes to see her colleagues. They are all debating and talking about what should happen now. One colleague says he knows someone who can do the accounting for the company. There are also some union people who say they can help, and ``we will get it the way you want it.'' Some colleagues go on the Internet to get some ideas, the director also arrives and he's looking nervous as hell. Before they realize it is already afternoon and nothing has been cleaned yet. One colleague jumps up and they decide that they should quickly start doing something. They all run out to their objects. Sietske doesn't manage to clean all objects that day, but she has put notes to the objects not cleaned that she'll make it up to them. She does manage to clean all trashcans though. Day 75: Sietske: Cleans all buildings, for some reason there's not a peep to be heard about yesterday. But that's maybe a good thing, enough to be done for one day. Day 76: Sietske: Hears there's a meeting in 10 days and that they will decide how the company will get set up. Day 86: : They decide by majority vote that the company will be a `worker - management cooperation' model, and that they will go on as before with a meeting every 2 weeks. They threaten the director to strike the business into destruction and to set up their own company to take over all business, or the director will retire with compensation. The director accepts the deal and so they to fire the director. They find out that he was the company starter and will have to be compensated out of future profits ! The Government regulations have already defined how, and the union people say there is no way around it, except striking the business into destruction, but that is probably only more expensive. The director had a big smile on his face after he heard that. But the cleaners don't even give it a single thought. They are with so many that it won't affect them much at all. One day those payments will stop but they will be there, hopefully. The owner had worked 20 years owning this company, so the payments will go on for 20 years to the tune of one average wage ! Some cleaners are grumpy about this, but not enough to spoil the happiness of becoming owners, and it will be about 5 times cheaper then what the director took out before. A few cleaners can't accept it though, and they say they will want to start for themselves. They agree that the new company can take with them a share of the objects that they already were cleaning, as long as the new company will be an open democracy right away. Then if it grows and picks up new employees, these new employees will have a share of power. Someone points out that this is a way to get around the pay to the previous owner if they all defect taking with them the assets of the cleaning company, but the union people say that they aren't so sure that a Judge will agree that this absolves them of their duty, since it is an artificial change potentially designed to evade the law. The cleaners see the point. Some secretly decide to go over to another company once the opportunity presents itself, one without this problem. The director starts wondering how much money he is actually going to end up with, maybe less then expected at first. Day 88: Sietske: Gets an invitation for a meeting for Day 90. Day 90: Sietske: Goes to meeting, and hears a Government Investment Group has send them a letter asking them if they are in financial trouble because of the changes. They decide that they are not, and don't need to lend any money. They discover how much money they have in cash now. Since the changes no money has been payed, but that still has to be payed by the object managers. They decide to go to the bank to ask for an account for their business, and then ask the object managers for pay. Most of the cleaners are already bottoming out of their credit on the account, some are in below zero already. Some are eating for free at the soup kitchens and some with family. So its not going very well. Day 91: : Colleagues of Sietske go to the bank to open an account. Turns out they have to wait all day, but eventually they managed to open an account. They wonder why they didn't just ask cash and go to work instead. Day 93: : The cleaners have started asking cash and most got a surprised reaction from the object managers, who were wondering when that question was going to come ! All of a sudden there is cash in the company. They decide to quickly share it with everyone, some more for one colleague who has 5 children to feed all alone. They think that it's really great this way. Suddenly they have power that they never had. Day 150: : For some time nothing has happened. Now some intellectual types have started to sound off on the Internet that the soil should be distributed, too. Day 180: : Some figureheads that are famous have said in the media that they want to go on and distribute the land. `Now we should go all the way,' and `we're only half way through now.' Day 200: : The farmers union presents a call to divide the land. The demand is given to the ministry of agriculture. They've divided the Nation into 15 agricultural areas and made a large report on how much this and that is worth in general for this and that crop. It is very detailed. Day 230: : The crops are being farmed but nobody is paying any land rent. An economist has written some studies that suggest this is not a good situation for the long term, because "nobody knows nothing about who owns what, the farmers are following the old ownership lines but for how long can that go on ? Some problems have occurred with farms that stopped producing and those fields are sometimes not farmed and sometimes neighbors are renting the land from the previous farm. The system is breaking down slowly. It is not a worry but now there is no system." Day 233: : The farming union has drawn up a plan to divide the land and presents it to the agricultural commission that is to solve the problem. At long last some numbers are coming out. First the farmers are allowed to each claim 3 hectares high quality distributive ownership for themselves to use, or 5 hectares medium quality, or 15 hectares low quality, but only if they already use it. Day 234: : Ownership applications start streaming into the agricultural ministry of farmers claiming a part of their land. The farmers are awarded it and some lands are being verified that they are of the claimed quality. Day 300: : Farmers are asking whether they have to have use contracts for the land they are using. A statement goes out that the farmers can now offer people a share of a maximum of 3 hectares high, 5 hectares medium or 15 hectares low quality farm-land. The cattle farms remain at their previous ranges, it is only for the crop and grass farms. Day 305: : It turns out that the rural area people have little trouble finalizing the contracts, where the city people are making almost zero contracts with farmers. City people have also no clue about what to demand in rent. Day 315: : The rich people are marching again, this time they are crying for real, because now they've actually lost a lot and suddenly they have to work for a living. Some people have pity on them, but there isn't a lot that can be done for them. Some wealthy people have killed themselves, this has rattled the Nation. Government urges everyone to stay calm. Day 318: : Turns out food prices are low this year because farmers haven't had to pay any soil costs or mortgage costs to the previously existing now removed for profit banks. This has led to downward price pressure from competition between farmers to sell their crops. Day 320: : Some private groups have sprung up to help negotiate contracts between farmers and city people. It turns out most city people are deeply disappointed at how low a rent they actually are going to get. Day 333: : A junior accountant at the agricultural office proposes to start working on the fishing rights system. The agricultural ministry is starting to understand the resource distribution model and initiative of the accountant is enthusiasticly embraced. `Ask for whatever help you need!' Day 360: Rob: Appears on TV with a big smile to tell the Nation that its going well. Some of the thousands of pleasure yachts have been found in nearby ports and are being returned. Quite a lot of movable valuables have disappeared from the Nation. But all in all the Nation is still standing, and according to Rob better for it. He has opened talks with neighboring Governments as to what to do with the lost loot if it turns up. He has also invited guests from other Nations to look at what has been done. A team of lawyers and law professors and a retired supreme court Judge has taken up the task of going through the laws of the country, identifying laws that have to be changed. Day 1000: Sietske is getting a whole lot better money for her effort, and for the first time she feels she is a human being. The monthly tax was not a problem and the monthly rent for her rental home has stayed more or less exactly the same. She has asked a support group to fix the resource contract for her with someone, which seems to have succeeded with a farmer for 56% of her right on the other end of the country, the rest is still hanging. Her income per month has become 30% better already and less work pressure, and there is some talk also with the union people that it should be more because cleaning is hard work and its not enough compared to other hard work. So maybe there will be some actions and a campaign for improvement. : Some of the homes of the very wealthy have been turned into schools, some have become company offices, some have become places where records are stored. : Many of the finance people haven't gone to work on the sewer systems despite the guaranteed work security for 5 years, which is better then anyone else has ! You just can't seem to please these people, can you. Most of them seem to have disappeared to other Nations or into the general labor market. The rich have stoped marching fortunately, have long since sold their golden pots and silver spoons. Some people still wonder if some of them have loot stashed somewhere, maybe abroad, some pleasure yacht hidden in some foreign Nation, who knows. The Government is still trying to find out. All that the rich seem to have left is their little cars they started driving in an effort to blend in. So long as everyone has to work for a living, it seems to have ended well, at least for now ... : There are now company transition courts to help companies become official democracies when the conditions are met. The banking system has professionalized beyond recognition, there are now offices everywhere and even online banking. It has been a few years already that new money was presented, and that worked remarkably well because they said that the old money would be valuable for an additional 2 month and then you could still switch it with the Government. You can also pay electronically if you like, but that has just started because it took some time to get the chips right, some kind of security flaw that had to be corrected again. Sietske and her collegues are now cleaning with great height adjustable mops. There is a lot more money in the company for things like this, now that the director doesn't control the profits for himself and his big car. ------------------------------------------------------------------------------ Notes: *1) 1 million persons * 70% (adults) / 13 (subgroups) = 54,000 persons a day = 7,000 persons an hour for 8 hours = 113 persons a minute = 2 persons a second If helping 1 person takes 10 minutes on average (identify, give account number + paper to sign it, give checks for that account number, potentially give cash), reaching a speed of 2 persons a second requires: 10 minutes * 60 seconds * 2 persons = 1200 concurrently running service counters per region of 1 million persons, assuming an 8 hour work period. ( 1200 counters * 60 seconds * 60 minutes * 8 hours ) / ( 10 minutes * 60 seconds ) = 57600 persons a day helped. 57600 * 13 = 748,000 persons helped after 13 days. 1200 counters, 2 persons each: 2400 employees per 1 million. 2400 employees per 1 million = 2400 / 1,000,000 = 0.25% One person in every 416, say one in 400 is needed to initiate the banking system at the desks. That is a low total burden, while still reasonably allowing for an average 10 minutes per costumer, 2 employees per costumer, and an 8 hour work day. Even when using 40 minutes per costumer, 4 times longer, which seems excessive, that would still just require 1% - one in a hundred, four times more - from the population. Even when using 40 minutes per costumer and using another 2 persons per counter as security so that doubles the needed people: 2% of the population would be busy with this, one in fifty. That is for every one person doing banking there are 49 persons left doing other things. The task of initial registering for accounts can be a simple task, especially if there are build-in low-tech defenses against fraud, which do not require a lot of work at the desk (see also below for a better idea then the surname-divisions: age-divisions). In reality it will be necessary to open numerous locations per sector to prevent traffic jams. It may be a good idea only to give a limited amount of cash, but enough to make it through some weeks, because some criminals may attempt to open several accounts at the same time. If technology is available it is probably an idea to make a simple passport picture (not scary biometrics or fingerprints, just a simple non-intrusive visible light picture like any normal camera makes) of each account-applicant, to scare off such scammers. When in doubt the pictures could be compared and that immediately yields a useful way to find/prosecute a potential criminal. If there are 10 concurrent counters per bank location, a low number to keep potential for chaos per location low, that means 120 locations (per +- 1 million persons sector.) Each bank location has an amount of numbered checks that it can turn into accounts for people asking for an account. Immediately after this initiation period the use of the bank could still be high as people who have an account want to withdraw more cash. After that the use is likely to come down to a normal cash/deposit-withdrawal and other mutations level. Since the system would be set up to handle everyone as long as they come per subgroup, every time the banking accounting system threatens to be overwhelmed when everyone can come any day the limiting subgroup method can be used. When that seems to persist the banking system accounting will need to be expanded permanently, until it is no longer necessary and everyone can come any day in principle. It is probably a good idea to ferry cash to locations at unusually small amounts per trip to keep losses of robbery low. Once something is lost from robbery security can be increased as needed while hunting down the criminals. Criminals may assume security to be lax because it is all so apparently difficult, which may make them more bold then usual. It may be a good idea to ferry valuables with excessive security like a small army, potentially including willing but not trigger-happy trustworthy non-police and non-army civilians. It could be an idea to allocate which people will protect what transport per last minute lottery, makes it hard to prepare robberies in advance using some people on the inside. The police can then stay close to the valuables, and if the robbery attempt is serious quickly burn the valuables and then hunt after the criminals. So much security and so little chance will scare away criminals and inside traitors, and then they won't likely dare to attack (unless they are suicidal/crazy). The rest of the police then has more hands free for law & order in the rest of society. Another probably better method then used by Rob above is to spread costumer demand on banks per age group per day: 15-20, 20-25, 25-30, 30-35 ... 55-60, 60-65, 70-75, 75-80, 85-90 ... . This method has some superior qualities: since one person can only reach so many banks in one day and every person its age can be estimated at least a little. That means a 23 year old criminal has only a few days (15-20, 20-25, 25-30) to try to pretend to be several people and open several accounts to get free initial money. That is lots better then doing it by name. This can be augmented by a simple not easy to remove but eventually wearing off non-uniquely-identifyable ink blob, slowing attempts to go to numerous banks down further. They would have to remove the blob without leaving marks and make it to another bank in time. This will probably mean almost none of this will happen. Once the ink has worn there is an age group so different that they will stand out like a sore thumb (both ways.) *2) *2) Christianity: If someone is worried about the "number of the beast" thing (Christianity, last book, a useful warning about not taking the "mark of the beast"): you can buy and sell just fine using cash earned from someone else in this system. No need to report that earned cash anywhere (unlike under an income tax system). No "number of the beast" necessary for selling and buying here. Certainly no numbers being carved into anyone its arm or forehead, or people being implanted with chips and numbers on them. Marking a person with a simple water resistant non uniquely identifiable ink blob that wears off in a few days would prevent criminals to go to several banks one after the other. There is no reason to put such an ink blob on someone's forehead or hands, seems there is reason not to (because it is stupid on the forehead and could wear too quickly on the hand). It would not be a number. Much less a number of the beast or your name. But the account number could be construed as a "number of your name." Though it gives a financial ability, people who have no account will be trading just fine *and* the ink would wear down and then nobody would have that anymore then. The ink blob, just as taking a picture, is not a critical part of the system. In principle the whole banking account itself is not critical since everything can be done in cash in theory, and that would actually work but it probably would mean a lot more work and less comfort. When in doubt I suppose one could not open an account when everyone is coming in at the first chance. Wait longer, and then open an account later when pressure is lower and there is more time. Then presumably there is no ink-blob thing because there is less volume pressure. One could make money in cash by working for other people. No doubt there are other solutions to the "criminal opens multiple accounts" problem. It is entirely possible that the ink blob solution will prove more trouble then it's worth, especially when throughput is low and therefore people can't make it to multiple banks anyway. A non-account money system means that a tax-collector will come buy every month or several month to collect taxes in cash, or people will have to deposit taxes in cash somewhere per so many days. I assume people will want to use the amenities of a virtual banking system along with a cash system: no need to store a lot of cash, easy transfers, easy periodic payments such as taxes, easy method for small on-the-fly debit lending. Handing everyone a big hand of cash and leave the bank accounts for later produces the same problem of identification: who has already had it, and then it will take lots of effort to collect cash taxes from everyone. Who has already payed ? A pure cash system does not necessarily mean fewer identification problems, but it likely means lots more hands-on work for Government, hence higher taxes to pay for that. Taxing individual accounts is extremely easy: deduct it. Can be done behind closed doors, when it is computerized it is effortless. The people who lack funds can then be helped with more attention. The cash component implies the Government has not the knowledge of how all the trade is flowing. *3) *3) The above clearly leads to a number of immediately pressing issues: - What to do with a person that becomes 15 on day 57, is it opening an empty account ? - Does everyone get 1000 credit points, even if they never worked perhaps because they are too young, even single mothers with 8 children ? - Will children aged 15 be paying 200 units in taxes every month ? If not when will taxation start ? - How will people above 70 pay for taxation when they are too old to work ? If they get a subsidy to live and pay taxation how high is that subsidy ? - How will crippled not starve to death ? Who will determine how much an individual crippled person can still work, is there such a thing as being half crippled for a half subsidy ? - How will unemployed people not starve before they find a job ? Will they be forced to work, or will their work only be to find or create work ? If they are put to work how, where ? Who can how find out if a person is really unemployed and not lying ? - When persons do not open any bank account won't they be evading taxation, and if so is that a problem ? If it is a problem how are these people to be found, or will they be cut off from community services ? If so, does that include starvation when at old age ? - When does a person get a resource right, at birth or later ? Incrementally or at once ? How is population growth dealt with ? What to do with immigration and resource rights ? - Are we really sure the money system is water tight ? If not how can we be ? How does who verify this, and why should we believe that ? - Are we really sure law & order is provided, or is there a case of total anarchy and chaos just below the surface that we pretend to ignore for the moment, until it erupts and destroys us all in a meal-strum of disintegration, confusion, panic, crime and misery ? What happens when a group of people gets it in their heads to start destroying a building just to see what happens ? Why will anyone care, who will do something about it if it happens ? Can we trust the leaders who coordinate varies things ? Why ? What happens when we can't trust the leaders for a minimum of law & order ? - Who is Government and how did they get to be Government, where do I complain about . (I expect things will be remarkably similar soon after, some things worse others better, but very slowly things get to change and become better and better in the long term. Nothing there that can stop it like it always did before: the for-profit finance and mass-ownership sectors are gone, money is being used for good rather then bad things, and that should stay that way over time (rather then being a temporary concession, revoked once pressure subsides).) There are also some issues that can come before of all the above: - People who think they can buy anything and make any debt, because if the money becomes worthless they end up with the valuables in their possession. This can be solved by for instance having people who have unnaturally high amount of valuables, have the above average amount be deducted from the amount of money they initially get (or the items are taken in or sold on new debt), where people who (clearly?) have an unnaturrally low amount of things get more initial currency as compensation. That again may lead to some people pretending to be poorer then they are, ... and so solving one problem will results in another, but hopefully one that is smaller then the original one. And so on solving progressively smaller problems, until its not worth the trouble anymore (cost of solution higher then value of solution, which comes quick when the value of items to be bothered about on a National level (!) becomes low (weeks, days or even just hours of work)). *4) Rob gives every person 1000 units, 100,000 cents. This is somewhat in line with todays (2008) value of the Euro and dollar currencies, giving each person one month income. There is more or less the freedom to start the economy with a much lower or much higher initial value. The lower the value given to each person the more the money will be worth per unit, the higher the value the less it will be worth per unit. There is a lower and upper boundary to the value of money: if one unit is worth a lot you may start to need to divide the cents, if it is worth little you may need to start carrying bills of 1000 to buy a pair of socks and the numbers to buy a home become astronomical. From a Government perspective it is easier to print more money and spend it or lend it away to make money worth less, than it is to take money out to make it worth more. People who expect a move to make money worth more might hide larger stashes from being taxed away, this may cause a strange residual effect where people with a lot of money multiply their wealth without working. Not that it is impossible to increase value per unit, but it is not as easy. Particularly in the beginning, when things are shaky and uncertain, it will be easier for Government to be able to inflate the money by just printing. The Government can then print and spend, causing the Government to have more money power at a time when it may need that to get things running. It is therefore useful for Government to start to give out money that is perhaps 2 or 3 or more times more valuable per unit, then what you eventually want to end up with. Giving each person a number of times less then what would eventually become an average wage will do that. In the short term Government will then print and spend, meeting the financial challenges of that initial time after rebooting the economy, until there is as much money in the system to give it its to be expected value. After that Government will need to tax for what it spends one unit for one unit, or the money devaluation would go too far. The Government should not print more money at too extreme a speed, because that causes price/wage instability. The Government should therefore probably start with taxation immediately, and use its temporary money printing leverage wisely. What should the value of money eventually be: it depends on the precision one wants. Money is a medium of exchange primarily for effort. Is it useful to have 1 minute of work be worth 10,000 cents ? Probably not, because one would rarely be trading 1/10,000th of a minute of work. Would one be trading an hour of work, certainly. Making one hour of average work worth 60 cents, means one minute is worth 1 cent. This seems to be a reasonable lower limit, it allows for differences in the price of one hour of work in 60 steps down to zero cents. If there are 40 hours of work in a week and 4 weeks a month: 40 hours * 4 weeks * 60 cents = 9,600 cents, 96,- money units as an average monthly wage. If one gives everyone 50,- units money representing one initial average wage to kick start the money exchange system, 5,000 cents, one will need small denominations, like a bill or coin for one cent, perhaps even a bill or coin for a quarter cent. The Government then has the leverage to print and spend one times worth the entire exchange economy until 100,- per person is in the system or as average wage. Some money will likely disappear in savings taking it out of rotation temporarily, which makes the remaining money worth more then it is supposed to. If the Government invests through a lending mechanism, it can pump in money, reducing the value of money, also temporarily. The benefit of reducing the value of money through investment is that it is easy to undo/control, and it can be made to have a stronger lasting effect if an amount is taken out through interest. The People will need to understand that those apparently measly 50,- represent an entire average working wage, so that they won't make the mistake of buying a loaf of bread for 2.50, which would mean one buys one loaf of bread for an 8 hour day of labor. If one loaf of bread costs 2,- today at 1500,- average income, that is 1/750th of an income. In minutes of work it is ( 40 hours * 4 weeks * 60 minutes ) / 750 = 12.8 minutes of work. With 50,- as average monthly income: 1/750th becomes 6 or 7 cents for a loaf of bread. 7 cents is working minutes: 5000 cents / ( 40 hours * 4 weeks * 60 minutes ) = 0.52 cents (a half cent) per minute, 7 cents is then about 14 minutes of work. When looking for grocery items the price of bread one would expect to see prices somewhere around the 1 to 10 cents range per item. This would then inflate in the coming period to prices around 2 to 20 cents, and then it should become stable. In theory it could also stay at 1 to 10 cents since the problem can be solved by making small denominations. But - like hyper-inflation on the other extreme - that does not seem to be very practical either. If Government responsibly taxes for what it spends, does not lose money through bad loans, then the money would remain fixed throughout eternity at the chosen value. There is no reason to inflate or deflate the money, there are sufficient policy measures to combat inflation (taxation, costlier loans) and deflation (print money) adequately. Shop keepers can solve the problem of lack of small denominations by bundling products in such a way that one bundle would reflect the value of the smallest unit. Thus if there is only a 1 cent and not smaller, but one tomato costs 1/20th cent, then one would sell them by the twenty. Or one would sell 5 tomato's for 1/4th cent, plus 2 banana's for 1/2 cent and one grapefruit for 1/4th cent, and ask 1 cent - but not before giving the Government a ring (I suppose) that you can't work like this and need more a precise money somehow. Government then pumps out money until one tomato costs 1 cent; or it produces coins/bills for 1/20th cent; or it pumps out money until one tomato costs say 1/2th cent and makes bills/coins for 1/2th cent: fiddling with value per unit and denominations made until the people are satisfied with it.